Carnegie: Instruments of Coercion: International Institutions and the Sites of Power in International Relations

The international institutions literature suggests that institutions help states cooperate by allowing states to credibly commit to specific policies. This paper argues that these commitments increase the costs associated with some foreign policy options, causing members to substitute towards less costly policies. The analysis is focused on a particular institution, examining how WTO membership affects states' manipulation of trade policies for coercion. I argue that because WTO membership curtails states' use of trade policies for foreign policy leverage, donors employ others levers of influence instead. After presenting detailed case study evidence in support of the theory, I test the model's predictions systematically, demonstrating that once states join the WTO, their trade flows become less correlated with political events, while other policy instruments, such as foreign aid allocation and unilateral preference programs, become more responsive to foreign policy issues.